Rethinking Householding

Posted by David King on Wednesday, May 25th, 2011

Every few weeks, our family receives a mailing from our regional grocery chain addressed to my wife containing some manufacturer promotion or announcing some new marketing program. It always strikes me as odd that these are addressed to my wife, since I am the family member that does almost all of the shopping. I suspect that my relationship and its rich purchasing history has been “householded” into irrelevance.

Householding — the grouping of customer records into addressable units — has become standard operating procedure in database marketing.  Householding’s roots lie in direct mail, where it was first employed as a measure to achieve cost savings. If one needed to mail a catalog to a home that had two or more customer, these residents could be collapsed into a household that would receive a single catalog. The theory  was that multiple members of the household would see the catalog and a purchase could result even with a single mailing.

As with many things that start out with a narrow purpose, householding has taken on a life of its own. I have sat through presentations, in which householding was promoted as the single most important key to understanding customer relationships.  It is routinely included as a core requirement in RFPs for marketing solutions, even when the main channels are interactive ones.

Here are some things that should encourage a rethinking of the importance and uses of householding.

  • Consumption of media is increasingly fragmented, something that began with the introduction of cable television over thirty years ago and that is still accelerating as communication channels proliferate. Some marketers still behave as though this fragmentation is restricted to the young or the affluent, but the evidence shows it is fairly ubiquitous. I think media fragmentation may not just present an issue of making it more challenging to reach customers, but may affect a whole range of factors. Even if I weren’t irked by the targeting of a non-buyer in my household, that error is compounded by channel and media: in our household, direct mail tends to get ignored, email might reach my wife, but I would be more open to a mobile promotion. If the starting point is to treat a household uniformly for messaging, then life only gets harder when one simultaneously ignores media consumption.
  • The dual-income family has become common in modern life. The push to allow women into the work place was not just about equality (and necessity), but about independence. As a result, buying decisions are also increasingly fragmented and individualized. I know of quite a few households, where with the exception of a home purchase, most buying decisions are not arrived at jointly. Sure, there are many households where a high number of purchasing decisions are made jointly, but as marketers, but we are rarely privy to this information. And, of course, I return to my own example: while my grocery shopping may be atypical, modern family life often has a higher degree of delegation of roles than adherence to traditional roles or joint decision-making.
  • The very definition of “households” has changed and will continue to evolve. The prevalence of unmarried couples living together continues to rise, as does the percentage of single-parent families. Several states now have same-sex marriage laws and more have laws that recognize domestic partnerships. And – at least according to some anecdotal evidence – the number of multi-generational households has risen during the recession. All of this means that a Ward-and-June-Cleaver model of a customer base may be fraught with problems. At the same time, we should not ignore that there are still many “traditional” households. My point is that we can no longer assume homogeneity nor market on that basis.

Given all these factors, the original notion that delivering a single communication to a group of people living under one roof would reach the “right” person is less true than ever. And the grander notion – that households make corporate decisions in most cases – was dubious to begin with.

Fortunately, the economics of direct marketing have changed. Delivering an email (or mobile message, targeted online ad, or any electronically delivered message) costs a small fraction of what a direct mail piece costs. Even if you still need to mail some of your customers or prospects paper, your overall expense is reduced as customers migrate to digital channels. These channels provide an opportunity for thoughtful consideration about how to speak to individual consumers in more differentiated ways. And if it makes sense to talk to “households”, then we also have a chance to tailor messages that are relevant to the many different flavors of families that we have today.

As I was finishing this article, I saw an article posted today at eMarketer that provides some interesting data as support to my points. The item reports the results of a recent study by Jacobs Media, a company that provides consulting to the radio sector (“the nation’s leading rock radio consulting firm”, according to the tagline on their site). Some highlights from the “Marketing To Men” study:

  • Men regard themselves as either the sole or a key decision makers on purchasing decisions for their household at about the same rate as women.
  • Men tend to be more inclined to research purchases before making them.
  • Coupons are used by men, too…it’s not just women who are interested in taking advantage of discounts.

It’s worth the quick read and provides another view of how changing demographics and behavior are shifting away from traditional, uniform notions of household decision-making.

P.S. The article on eMarketer links to a post about a Yahoo! study that indicates dads are feeling neglected by marketers’ pursuit of women and that they believe themselves to be the primary decision makers in many categories. It, in turn, links to another study in which women report that they are the primary decision makers. I’m not surprised by the difference of opinion between the sexes; I think such contradictions validate that that roles within families continue to evolve.

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